Blantyre Hotels (BHL) plc shares have not traded on the 16-counter Malawi Stock Exchange (MSE) since listing rights shares on December 30 2024 despite potential for investors to make quick gains by selling the stocks.
Money market analysts have described the situation as pointing to investors’ confidence on BHL’s long-term gains based on its 180-bed golf estate hotel under construction in Lilongwe.
The rights shares, offered at K12.38 each, raised K62.4 billion for the completion of the hotel project and were listed on MSE at K14.55 per share.
This means that as of today, investors can sell the stock at an 18 percent profit.
Investors are clinging on to the shares even after a trading statement has projected that BHL, which owns Protea Hotel by Marriot Blantyre Ryalls, will make a consolidated loss after-tax ranging from K1.7 billion to K1.85 billion in the year ended December 31 2024 due to finance charges incurred for the Lilongwe hotel project.
In an interview yesterday, Stockbrokers Malawi Limited equity investment analyst Kondwani Makwakwa said that the situation denotes how investors are determined to maintain their shareholding for long-term returns.
He said: “It is likely that a majority of shareholders are long-term investors who are content to hold their positions and are not focused on immediate gains.
“Although the company is projecting a loss for 2024, these long-term investors may continue to hold their shares in anticipation of future returns.”
MSE chief operations officer
Keline Kondowe said the holding of the shares could be attributed to several factors, including that the new shareholders want to “wait and see” how the company progresses.
“The most significant could be that most of the shareholders are new; hence, looking at long-term rather than short-term.
“As such, they are holding on to their investment, which is a demonstration of the trust they have in the company and our stock market.”
In a separate interview yesterday, a stock market investor and director of Minority Shareholders of Listed Companies Joe Maere said this is a sign that investors are confident that the Lilongwe hotel project will add value to the company in the long-term.
“Most investors that participated in the rights issue are medium and long-term oriented because they were already aware of the imminent loss for now, but after the Lilongwe hotel project is completed, they know they will reap more,” he said.
Maere said currently, Protea Hotel by Marriot Blantyre Ryalls generates 40 percent of its revenue from foreign exchange and these investors are confident that the Lilongwe hotel project will further strengthen the position of BHL.
During the listing of the rights shares, BHL board chairperson Vizenge Kumwenda projected that the Lilongwe hotel will generate more than 50 percent of its revenue through foreign exchange.
He said this is because the hotel, which is now in the finishing phase and will be completed this year, is located within the premises of Lilongwe Golf Club, targeting foreign visitors.
After the rights issue, the public now own 31.57 percent, Nico Life Insurance Company has 31.06 percent, Africap LLC owns 22.15 percent while Nico Holdings plc has 15.22 percent stake.
After the rights issue, Nico Holdings plc replaced Press Trust as one of the non-public shareholders while members of the public shareholding more than doubled from just below 10 percent.
